Tencent Buys 20% of China’s 58.com for $736 Million

June 28 (Bloomberg) -- Tencent Holdings Ltd. agreed to buy
a 19.9 percent stake in 58.com Inc. for $736 million, as Asia’s
largest Internet company adds to investments this year that
include purchasing a stake in e-commerce website JD.com Inc.

Tencent will buy 36.8 million Class A and B ordinary shares
in Chaoyang, China-based 58.com at $20 each, according to a
statement distributed through PR Newswire yesterday. The two
companies also agreed to use each other as preferred partners
for local services, according to the statement.

The investment in 58.com, which provides online classified
ads, will expand the choice of local services and merchants
available to Tencent users, according to the statement. The tie-up will help build 58.com’s user base by capturing traffic from
Shenzhen-based Tencent’s messaging services WeChat and QQ, the
companies said.

Tencent is adding games and advertising services to
messaging applications including WeChat, known as Weixin in
China, as it competes with Alibaba Group Holding Ltd. and Baidu
Inc. The company is counting on its apps and games like Blade &
Soul and Candy Crush Saga to win a bigger slice of China’s 618
million Internet users as they migrate toward content on
smartphones.

Tencent in March agreed to buy a 15 percent stake in JD.com
and transfer some of its own assets to build a stronger
competitor to Alibaba. In February, it acquired 20 percent in
Dianping, the operator of a Yelp-like website in China, to
strengthen location-based services.